Disclaimer: We are not attorneys and this post does not constitute legal advice. Please consult a qualified attorney for guidance on your specific situation.
If you’re going through bankruptcy and own a home in Alabama, you may be wondering if you can still sell your house. The answer is yes—but it depends on the type of bankruptcy you’ve filed and how far along you are in the process. Selling a house during bankruptcy can be complicated, but it’s not impossible. Here’s what you need to know.
Can You Sell Your House During Bankruptcy in Alabama?
In most cases, you can sell your home during bankruptcy, but you’ll likely need permission from the bankruptcy court. Whether you’re in Chapter 7 or Chapter 13 bankruptcy makes a big difference.
Chapter 7 Bankruptcy
In Chapter 7, your assets—including your house—can be liquidated to pay off creditors. However, Alabama offers a homestead exemption, which may allow you to keep your home if it falls under the exemption limits and you’re current on your mortgage. If the house has equity above the exemption or isn’t protected, the trustee might sell it.
If you want to sell during Chapter 7, the court-appointed trustee must approve the sale, and the proceeds may go to pay your debts.
Chapter 13 Bankruptcy
With Chapter 13, you’re on a repayment plan that typically lasts 3 to 5 years. You often keep your property, but you must repay some or all of your debts through the plan.
If you want to sell your house during Chapter 13, you’ll need:
- Court approval
- A legitimate reason for selling (e.g., financial hardship, relocating, downsizing)
- To show that the sale benefits the bankruptcy estate and won’t hurt your creditors
The court may allow the sale if it helps you complete your repayment plan or avoid further financial issues.
Why Sell a Home During Bankruptcy?
There are several reasons why homeowners in Alabama choose to sell while in bankruptcy:
- You can no longer afford the home
- You’re relocating for work or family
- The house needs expensive repairs you can’t afford
- You want to avoid foreclosure or further financial strain
Can You Sell to a Cash Home Buyer During Bankruptcy?
Yes. In fact, many Alabama homeowners choose to sell to cash buyers because it simplifies the process. With no agents, no commissions, and a fast closing, you avoid many of the delays that come with a traditional home sale.
However, you still need court approval. A local title company or bankruptcy attorney can help guide you through the process.
How Morgan Matney Home Buyers Can Help
We specialize in buying homes in difficult situations, including bankruptcy. If you’re looking for a way to sell your Alabama house quickly and avoid further stress, we can make you a fair cash offer with no obligations.
We also work directly with your attorney or trustee to make sure the process follows all legal guidelines.
Next Steps
If you’re in bankruptcy and considering selling your home, talk with your attorney first. Then, reach out to us for a confidential consultation. We’ll walk you through your options and make sure you’re fully informed before moving forward.
Disclaimer: We are not attorneys and this post does not constitute legal advice. Please consult a qualified attorney for guidance on your specific situation.